VAT on PPI reclaim

Chippie

Surely as they are dealing with you as a retail customer Vat should be included in their original schedule of charges. In retail transactions, Vat must be included so if you were told originally that the charges were 25% and then on settlement Vat takes that to 30% I would say you have been mislead.

Business to business transactions are generally quoted ex Vat, retail transactions must be Vat inclusive.

[Deleted User]

I've yet to see anyone complain successfully about this separation of the fee charged and the VAT.

Julcamp

Chippie wrote: »

Surely as they are dealing with you as a retail customer Vat should be included in their original schedule of charges. In retail transactions, Vat must be included so if you were told originally that the charges were 25% and then on settlement Vat takes that to 30% I would say you have been mislead.

Business to business transactions are generally quoted ex Vat, retail transactions must be Vat inclusive.

Sorry just to clarify. Should I be approaching the bank for a refund of the vat or should I not pay the vat to the claim company. I'm a consumer not a business.

[Deleted User]

Julcamp wrote: »

Sorry just to clarify. Should I be approaching the bank for a refund of the vat or should I not pay the vat to the claim company.

I think you are confusing the tax payable on your 8% redress with the tax payable on the Claims Company fee.

The Bank have deducted tax prior to paying your redress which is correct. The CMC have charged you a fee for claiming on your behalf and this too is taxable.

You have to pay both I'm afraid. No refund will be forthcoming from either.

dunstonh

You are not paying tax twice. You are paying tax on two different things.

The interest received is taxable (as is the norm with interest). That is taxed at 20%.

You then employed a company to provide a service. The service they provide is taxable under VAT.

Is this right.

yes

jimmyg23

Moneyineptitude wrote: »

I think you are confusing the tax payable on your 8% redress with the tax payable on the Claims Company fee.

The Bank have deducted tax prior to paying your redress which is correct. The CMC have charged you a fee for claiming on your behalf and this too is taxable.

You have to pay both I'm afraid. No refund will be forthcoming from either.

Can you clarify: You get a PPI refund from the bank which includes interest. The bank removes 20% tax on the interest. Are the CMC allowed to charge a fee (plus 20% VAT on top) on the whole amount including the amount removed for tax or can they only legally charge for the actual amount physically paid by the bank?

[Deleted User]

jimmyg23 wrote: »

Can you clarify: You get a PPI refund from the bank which includes interest. The bank removes 20% tax on the interest. Are the CMC allowed to charge a fee (plus 20% VAT on top) on the whole amount including the amount removed for tax or can they only legally charge for the actual amount physically paid by the bank?

Thanks for responding to a post I made almost three years ago (on a thread over 4 years old)..

The CMC take a percentage of the total amount awarded (refund plus interest) before tax.

CMC's fees are liable to VAT, so whatever they charge has a VAT element.

Since this is money which goes to the government, the CMC don't "legally charge" it at all. The government does.

The tax charged already on the interest is irrelevant.

paul_harkin

I am a Ppi Credit Controller VAT is calculated at 20% of the total award not the fee figure

[Deleted User]

paul_harkin wrote: »

I am a Ppi Credit Controller

?????

paul_harkin wrote: »

VAT is calculated at 20% of the total award not the fee figure

Did you really just bump up a thread from 2012 to say that? It's nonsense anyhow.

dunstonh

I am a Ppi Credit Controller

Somebody likes giving out daft job titles at your place of work.

VAT is calculated at 20% of the total award not the fee figure

That is not correct. There is no VAT charged on the "award". The VAT is charged on the fee of the claims company.